How can I save money on my home loan in 2022?

The Reserve Bank of Australia has increased the cash rate 5 times since the start of 2022. Currently, the cash rate is sitting at 2.35%. As a result, many borrowers are wondering how they can save money on their home loans. If you are one of these people, fortunately, there are a few things you can do to save money both now and in the future.

  1. Refinance your home loan for a better option: One way you can save money on your home loan is by refinancing. There are many banks and lending institutions out there, all with different rates. Negotiating a new interest rate may help you save significant money on your home loan. Check with your mortgage broker about any offers the lenders may have available.
  1. Pay extra money in your monthly payments: Another option is to make extra repayments on top of your monthly mortgage payments this will shorten the term and reduce the interest on the loan over time. Instead of repaying over 30 years, you may be able to repay your home loan over 25 years. Every little bit counts and in the end, it can add up to some serious savings.
  1. Set up an offset account: You can also set up an offset account with your bank. Let’s say you have a $300,000 loan, if you have $20,000 in an offset account, and it’s linked to your home loan, you will only need to repay interest on a $280,000 loan. For even better results, try to increase the amount of money in your offset account by depositing your income to the offset account.
  1. Use a mortgage broker: Another option is to use a mortgage broker. Mortgage brokers can find options from various big and small lenders based on your situation. You may benefit instantly by getting a lower rate or some introductory offers available for new customers. Talk to your mortgage broker about your options before refinancing or fixing a rate, as they may be able to get you an even better deal.
  1. Make more frequent payments: Instead of repaying your home loan monthly, you may be able to repay it weekly or fortnightly, which will decrease the overall term of the loan by a couple of weeks each year. Doing this may shave a couple of years off your loan term.
  1. Ensure you’re not overpaying fees: Make sure you are not overpaying fees by reading the small print on your home loan documents. Some home loan features attract fees, so if you are not using them, then you may be able to save some money on the costs associated with your home loan.

These are a few ways in which you can save on your home loan in 2022. You may see some savings when you adopt these strategies. Speak to your mortgage broker to find a better home loan option. Good luck!

Disclaimer: The information provided in this article are general in nature. Please seek expert advice before changing your home loan. WhiteStar cannot advise the savings until a full client interview has been completed and supporting documents received and verified. All applications are subject to responsible lending guidelines and lenders criteria.